WORLD TRADE  
ORGANIZATION  TN/RL/W/228 
11 April 2008 
 (08-1640) 
Negotiating Group on Rules Original:   English 
  
 
NON-PAPER PROVIDING AN OVERVIEW OF THE MAIN POINTS MADE IN THE 
BRIEFING SESSIONS ARRANGED BY THE GENEVA GROUP OF COMMONWEALTH 
DEVELOPING COUNTRIES AND ACP GROUP OF STATES ON THE PROPOSALS FOR 
MODIFICATIONS IN THE AGREEMENT ON ANTI-DUMPING PRACTICES 
 
Communication from Trinidad and Tobago
 
  
 The following communication, dated 5 March 2008, is being circulated at the request of the 
Delegation of Trinidad and Tobago on behalf of the members of the Geneva Group of Commonwealth 
Developing Countries.   
 
_______________ 
 
 
I. INTRODUCTION 
 The Geneva Group of Commonwealth Devel oping Countries and the ACP Group of States 
had, at the request of delegations from their memb er countries, arranged jointly special meetings to 
brief them on the proposals for modification in  the Agreement on Anti-Dumping Practices (ADP) 
which have been suggested by the Chairman of th e Negotiating Group on Rules in the draft legal texts 
circulated by him (TN/RL/W/213, 30 November 2007).  The main objective of these meetings, which 
were held on 18 January and 8 February 2008, was to improve the understanding of the member 
delegations of the issues that are under discussion in the Negotiating Group, particularly for those 
delegations which had not been so far able to partic ipate actively in the negotiations in this area, by 
explaining in as simple language as possible the co mplex rules which the Agreement lays down, the 
reasons for which changes in the ru les had been suggested by some of the delegations, the stand taken 
by other delegations on the proposed changes a nd the possible impact wh ich the acceptance of the 
modifications may have for the application of th e rules.  These briefings were provided by the 
Commonwealth Multilateral Adviser and the resource persons
1 drawn from the delegations of the 
member countries of the two Groups who are actively participating in the negotiations in this area.2  
The presentations made by the resource persons were  followed by a brief discussion and exchange of 
views on the possible approach that the members of the two Groups could adopt on the following 
proposals for modifications that were identified in the first session as being of importance and concern 
to the trade interests of the member countries and for the application by them of the rules of the 
Agreement:    
• Extension of special and differential treatment to developing countries;   
                                                     
 
1 The views provided in the Briefing Sessions by the Resource Persons were made in their personal 
capacities.   
2 The resource persons who provided the briefi ngs included Mr. Vinod Rege, Multilateral Trade 
Adviser, Geneva Group of Commonwealth Developing Countries;  Dr. Krishna Gupta, Counsellor Indian 
Mission;  Ms. Anne Kamau, First Secretary, Kenyan Mission and Mr. Desmond Tay, First Secretary, Singapore 
Mission.   TN/RL/W/228 
Page 2  
 
  • Use of zeroing in the calculation of margins for dumping;   
• Lesser-duty rule and public interest;   
• Anti-circumvention;  and 
• Duration of anti-dumping duties.   
  In addition the discussions took place in th e desirability of adding to the Agreement a 
provision for its major review after a period of five years after the amended provisions became 
operational.   
 
 The responsibility of Chairing these meetings wa s shared between Amb. Dennis Francis of 
Trinidad and Tobago, Chairperson of the Geneva  Group of Commonwealth Developing Countries and 
Amb. Gail Mathurin of Jamaica and the Chairperson of the ACP Group of States.     This Non-Paper provides in the section which fo llows an overview of the main points made in 
the discussions in the two meetings and of the tent ative suggestions that were made of the possible 
approach that the members of the two Groups could consider adopting on the above-listed issues.   
  It needs to be emphasized that the non-paper only provides a synoptic picture of the points 
made in the background papers that were prepared fo r the meetings and of the views expressed by the 
resource persons and participants.  Even though th ese views appear to have broad support of the 
delegations of member countries of the two Groups who participated in the two meetings, they should 
not be anyway construed as limiting their right or the rights of other member delegations belonging to 
the two Groups to take, if they wished, any negotiatin g position that is different than that indicated in 
the Non-Paper.   
 
II. OVERVIEW OF THE MAIN POINTS DISCUSSED AND OF THE VIEWS 
EXPRESSED IN THE TWO SPECIAL MEETINGS 
 This section is organized as follows.  For each proposal for the modifications in the rules 
listed above, a brief description is first provided of the proposed modifications.  This is followed by 
the description of the tentative suggestions that were considered on the approach that could be 
adopted in the negotiations on the proposals for modifications, which were discussed in the two 
meetings.    
1. Extension of Special and Differential (S &D) Treatment to Developing Countries 
 The Kenyan proposal on the extension of S& D treatment which was submitted to the 
Negotiating Group on Rules on 27 June 2007 has now received broad degree of support from 
developing countries belonging to the Geneva Group of Commonwealth Developing Countries and those belonging to ACP and African Groups.  Since the holding of the briefing sessions, a revised 
proposal containing legal-based text proposing clar ification of the rules of Art. 15 on "Developing 
Countries" in the ADP Agreement has been subm itted to the Negotiating Group on Rules.  The 
proposal inter alia suggests that:   
 
• Provisions of Art. 5.6 of the ADP Agreement, wh ich state that "in special circumstances" the 
rule which the Agreement lays down, that app lication for levy of anti-dumping duties must be 
made by or on behalf of the industry coul d be deviated and permits the governments to 
request investigating authorities to initiate inv estigations, exist in developing countries as the 
affected industries encounter serious difficulties in:   
 
- Collecting information on volume of imports and on their prices, viz, export prices 
and prices prevailing in domestic mark ets of the exporting country, and  TN/RL/W/228 
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  - Establishing "standing" for applying fo r investigations by demonstrating, inter alia , 
that the application has the support of th e producers accounting for at least 25 per 
cent of the total production.   
 
• Because of these circumstances, it should be reco gnised that, to assist industries which are 
alleging that increased imports are causing in jury to the domestic industry in collecting 
information on volume of imports and their prices, the governments of these countries may put the imports of products that are alle ged to be dumped under surveillance.   
 
• Such surveillance may be exercised by intr oducing a system for automatic licensing under 
which importers are required to declare in thei r application for licence, the import price and 
the price for sale by the export er in his domestic market.   
 
• Such licences would be issued automatically in  fifteen days in accordance with the provisions 
of the Agreement on Import Licensing and sha ll not be used for restrictive purposes.   
 
• The legal-based text further identifies areas in  which the developing countries would need 
technical assistance.   
 
• It further suggests that there should be a review of the provisions of the Article after an agreed 
specified period of 5 years, in order to exam ine whether any improvements in the provisions 
are necessary, taking into account the experien ce of the applications of the Agreement by 
developing countries.   
 
2. Use of Zeroing in Calculation of Dumping Margins 
 The Agreement on Anti-dumping Practices lays down that the margin of dumping on the 
basis of which the amount of anti-dumping duty is payable by an exporter is determined, should be 
calculated by comparing the export price with th e home market price of the dumped product under 
investigation.  Some of the developed countries, which have been major users of anti-dumping duties, 
have been traditionally using in calculating dumping margins, the practice of what has come to be 
known as "zeroing".   
 
 Zeroing refers to the practice under which the investigating authorities, while making multiple 
comparisons of the export price with the home market  price, take into account only transactions where 
margin is positive (i.e. transactions in which export price is less than home market price) and ignore 
or treat as zero, transactions in which the margin is  negative (i.e. transactions in which export price is 
higher than the home market price).  The practice of zeroing leads to determination of higher dumping 
margins and thus to the imposition of higher amount of anti-dumping duties.     The Appellate Body has held that the practice of  zeroing, both in original investigations and 
in the subsequent reviews is not permissible under the provisions of the Agreement.  The Chairman's 
text however, prohibits the use of zeroing only in orig inal investigations, if the margin of dumping is 
calculated on the basis of comparison of export and home market prices on weighted average to weighted average basis and not by the other tw o methods prescribed by the Agreement for the 
determination of dumping margins.  It also permits the use of zeroing in reviews undertaken subsequently, regardless of the comparison methodologies used.    
 About 20 developed and developing countries have so far e xpressed that the draft text lacks 
balance, primarily due to the inclusion in the text  legalising the practice of "zeroing".  These members 
and others further proposed alternative texts to the Chair's proposed language on the issue of zeroing.   
 TN/RL/W/228 
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   The only country which is consistently opposin g the adoption of the rule prohibiting the use 
of zeroing is the United States.  It has maintained that it would not be able to agree to modify the 
practices which it adopts for zeroing during this round of negotiations.  There is also strong opposition 
in the United States Congress to the abolition of the application of zeroing in determination of dumping margins.   
 
 The other developed countries which adopt the practice of zeroing in very limited circumstances, such as the EU and Canada, appear  to have shown readiness to do away with the 
practice of zeroing, if there was a general c onsensus on the need to prohibit its use.   
  As most of the developing countries which were actively participating in the negotiations in 
this area are pressing for the prohibition of the practice of zeroing and there was willingness on the 
part of most of the developed countries to go along w ith the proposal, there appeared to be a general 
support from the participants to the view that it ma y be desirable for the members of the ACP, the 
Commonwealth Developing Countries and the small and vulnerable economies to consider whether 
they could also indicate their support to the incl usion of the provision in  the Agreement prohibiting 
the use of zeroing practice both in original in vestigations and in subsequent reviews.   
 
3. Application of Lesser Duty Rules 
 The ADP Agreement provides that the imposition of anti-dumping duties should be 
permissive and recommends that countries should exam ine at "policy level", after the report of the 
investigating authorities has been received, whether or not anti-dumping duties should be levied and if 
these are to be levied, lesser duty than that is r ecommended by the investigating authorities should be 
imposed, if it was adequate to meet the injury to the domestic industry.     These provisions for the application of lesser duty are at present recommendatory.  India, 
Brazil and Japan have singly and jointly proposed th at the rule should be made mandatory.  The view 
among participants on making the rule mandatory is divided.  The US in particular has expressed 
strong reservations.     The Chairman's text deletes the provisions whic h require countries to consider applying lesser 
duty, if this was adequate to meet injury to the domestic industry.  This would mean that there would 
not even be recommendatory or non-binding obligation to apply lesser duty for these considerations.  
At the same time, the text tries to impose an obliga tion to apply lesser duty, if  the application of such 
lesser duty is considered necessary for protection of pub lic interest (e.g. interest of consumers and of 
industrial users of the product).  The obligation to ap ply the public interest test is however subject to 
the proviso that any decisions taken in pursuance of this obligation would not be subject to WTO 
Dispute Settlement procedures or even to challenge in national courts.   
  The introduction of provisions on "public interest" on the lines suggested by the Chairman has not been generally looked with favour by a number of countries.     The participants in the sessions noted in this  context that the Agreement at present requires 
the investigating authorities to take into account the interest of consumers and of domestic users 
(i.e. public interest) at the investigating stage.  Art. 6.12 of the ADP Agreement specifically requires 
investigating authorities to provide "opportunity to industrial users and to representatives of consumer 
organisations in cases where product is sold at retail le vel, to provide information which is relevant to 
the investigations regarding dum ping injury and casualty".   
 
 In the situation of imposing an obligation on countries to go through once again the procedures for taking public interest into account, wh en the report of the investigating authorities is 
being considered at policy level, may lead to unnecessary duplication and could lead, in the view of  TN/RL/W/228 
 Page 5 
 
 
  many analysts, to politicisation of the decision-maki ng process.  In practice also, this could lead to 
more importance being given to the interests of consumers, as compared to those of the affected industry which is incurring losses and of the workers who are losing jobs as a result of injury caused 
by dumped imports.     Against this background, it was considered that it may be desirable for the members of the 
two Groups to consider whether it would be possible for them to take a position against
 including the 
provisions in the Agreement requiring countries to take into account "public interest" considerations 
at the time when decisions are being taken at po licy level, on the application of anti-dumping duties 
and their levels.   
 
 At the same time it would be desirable for the member countries of the two Groups to press 
for restoration of the provisions which the Chairm an has deleted, recommending application of lesser 
duty rule, in cases where such lesse r duty is considered adequate to meet the injury to the industry.  
However, the question whether the obligation to app ly lesser duty rule should be made obligatory, 
should be left to be decided by each member c ountry taking into account whether it would have at 
present the capacity to calculate separately, wh ile calculating margins of dumping for the 
determination of final duty, lesser duty that could be  applied on the basis of the "criteria" that may be 
adopted for this purpose.   
 
4. Inclusion in the ADP Agreement of provisions on anti-circumvention 
 Exporters whose exports are subjected to an ti-dumping duties may circumvent payments of 
such duties by shipping in parts the product or by shipping parts to a third country for assembly or by 
exporting the product in a slightly modified form.     The proposal for inclusion in the Agreem ent of provisions preventing countries from 
circumventing the application of anti-dumping duti es by following such practices was considered 
during the Uruguay Round and later, after its conclusion, in the ongoing work of the Committee on Anti-dumping Practices.  These negotiations ha ve, however, remained inconclusive.   
  The Chairman's text suggests addition in the Agreement of a new provision Art. 9 bis on 
Anti-Circumvention.  The suggested text contains provisions which are very similar to what were 
proposed in the Dunkel Text during the Uruguay R ound of Negotiations, but could not then garner 
consensus due to wide differences in views.     Opinions among participants in the Negotiating Gr oup on the desirability of inclusion of such 
provisions continues to be widely divided.  A la rge number of countries, including many developing 
countries, consider that incorporation of the pr ovisions in the ADP Agreement on anti-circumvention 
could lead to unnecessary harassment of exporter s.  In practice also, it would be difficult to 
distinguish between situations where producti on is undertaken by the exporting company for 
assembly in a third country in order to avoid paym ent of anti-dumping duties and situations where the 
decision to locate such production in other count ry is taken by it for economic and commercial 
reasons, such as lower cost of production or transport costs.  The introduction of such a provision 
may, by posing threat of extension of anti-dumping du ties to products of such industries, also in the 
long run have effect on flow of investment to developing countries.    
 It was noted that because of these reasons, a number of delegations are pressing for the 
removal from the Chairman's text the proposed Article on Anti-circumvention.  Recently China, 
Pakistan and Hong Kong have tabled a paper in the Negotiating Group on Rules requesting the 
Chairman to delete the Article from his text.  The participants in the two sessions considered that 
taking into account these concerns expressed by many developing and other countries, it may be TN/RL/W/228 
Page 6  
 
  desirable for them to consider whether they should also support the demand for non-
inclusion of the 
provisions on anti-circumvention.    5. Duration of Anti-dumping Measure 
 The ADP Agreement provides that the anti-dumping duties should be terminated after a 
period of five years from the date of the applicati on, unless in a review undertaken before the expiry 
of five years, it is established that the termination of duty is likely to lead to the continuation or 
recurrence of dumping or injury.     In practice, these reviews which have come to be known as sunset reviews, are often used to 
secure continuation of the duties for a further period.  In some of the countries, these duties have been 
in existence for over 20 years.     The Chairman's text aims at tightening the di scipline applicable to the initiation and conduct 
of sunset reviews and provides that anti-dumping duties must be terminated within a period of 
10 years from the date of their imposition.   
  The opinion on whether there should be a targ et date for the termination of anti-dumping 
duties is divided.  There are also differences on the period of duration.  Some  would prefer to have 
shorter periods of duration, such as 5-8 years, in stead of 10.  Most of the developing countries 
however appear to be in favour of having a specified termination date for such duties.   
 
 The general view among the participants in the sessi ons was that it would be desirable for the 
members of the two Groups to consid er whether they would like to indicate support to the proposal in 
the Chairman's text to have an agreed p eriod of duration for such measures.   
 
6. Inclusion of Provisions in the Agreement fo r Major Review of its Rules after Five years 
 It was observed that it had to be reluctantly accepted that a large number of developing and 
least-developed countries and small economies had not b een able to participate effectively so far in 
the negotiations in the rule-making area in this Round.  Even though they may make now during the 
last stage, some efforts to take active interest in the developments in the negotiations, in most of the 
areas of rule-making such as anti-dumping and other trade remedy measures, their participation was 
expected to be far from effective, as they were not  able to associate in their delegations, because of 
financial constraints, officials with expertise and e xperience of work in this area.  A number of these 
countries also lacked experience of the applicati on of the rules in such areas as anti-dumping and 
countervailing measures, as they had not been able to establish so far, the legal and institutional 
framework that was needed for the imposition of anti-dumping measures.   
 
 This raised the question as to whether it would be in the interest of these countries and in the overall interest of the WTO system as a whole,  to suggest that the proposed Agreement should 
provide for its major review five years after it becom es operational.  In this context, the meeting noted 
that the following factors would have to be taken in to account in considering this issue further.   
 
• The provisions providing for a major review on the basis of the experience of their operation, 
were contained in some of the WTO Agreements.  The Agreement on Technical Barriers to Trade for instance, provided for a major review of  the Agreement after a period of first five 
years with a view to examining whether an y changes in the rules were required.   
  TN/RL/W/228 
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  • There was a growing view amongst economists and legal experts that a number of WTO 
Agreements negotiated in the Uruguay Ro und presented implementation problems for 
developing countries, as they were  adopted without effective participation of these countries.   
 
• Proposals for review of certain aspects of the rules were either already contained in the 
Chairman's text or had been proposed for incl usion in the ADP Agreement.  Annex III which 
the Chairman has proposed should be added to the Agreement and would provide procedures 
for separate reviews of anti-dumping systems and practices of individual countries, contains 
provisions for review of the procedures which it la ys down after a period of five years, with a 
view to finding whether any changes or modifi cations were necessary in them.  Likewise the 
countries belonging to the ACP and African Groups  which have suggested extensive revision 
of Art. 15 on "Developing Countries" have pr oposed that there should be review of its 
provisions after five years with a view to exam ining whether any changes in the rules relating 
to the extension of special and differential treatment to developing countries and in the 
provision on technical assistance were needed.   
 
• The analytical literature on the evolution of WT O rules in the area of anti-dumping practices 
has brought out that Agreement on Anti-dumpi ng Practices, which was adopted in the 
Uruguay Round, resulted mainly in the harmoniza tion of practices followed by the developed 
countries which were then major users of anti-dum ping measures, particularly the US and EU.  
The participation in the negotiations by other countries, particularly developing countries, was 
minimal and far from effective as they had no experience at that time of the application of anti-dumping measures.  In the present Round, in addition to developed countries, a few of 
the developing countries which have now reach ed higher stage of development and have 
become important users of anti-dumping duties are actively participating in the negotiations and have been able to make c oncrete proposals for improvements in the rules which take into 
account the practical difficulties they are encount ering in their application.  Because of the 
lack of expertise as well as the absence of e xperience in the application of anti-dumping and 
other trade remedy measures, a large majority of the remaining developing countries have not 
however been able to participate effectiv ely in the present round of negotiations.   
 
• However, in the post-Doha Round period, most of these countries would have to rely on the 
application of anti-dumping or other trade remedy measures, as the flexibility available to them to provide increased protection to indus tries that are affected by increased imports 
would be greatly reduced as they would be requi red to bind all of their tariffs, both in the 
industrial and agricultural sectors.  Most of th em would not be also able to apply quantitative 
restrictions to imports due to the GATT discip line against the use of quantitative restrictions 
by which they would have to abide increasingly as a result of their gradual integration into the 
WTO system.   
 
• Consequently, a review of the Agreement on an  overall basis (not only of the provisions 
relating to developing countries of the revised Ar t. 15, but also of other provisions in the 
Agreement), would enable them to seek modifi cations or changes in the rules taking into 
account their experience of the application.   
 
• In examining further this issue, it has to be bor ne in mind that the experience of the operation 
of the ADP and other Agreements dealing with trade remedy measures, such as that on safeguards, has brought out that in the absence of the process of review of the rules, countries 
often try to find improvements in the rules th rough securing judicial interpretation by the 
Panels and the Appellate Body.   TN/RL/W/228 
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  • It is estimated that nearly half of the cases brought before the dispute settlement body since 
the establishment of the WTO relate to trade re medy measures and other rules based issues.  
In deciding these cases, the Appellate Body h as, according to some of the eminent legal 
experts, overstepped their f unctions and created new law.
3  The WTO Dispute Settlement 
System does not envisage creation of new law by the Appellate Body but requires it to 
confine itself to the interpretation of the rules adopted through negotiations among WTO 
Member countries.  As over ninety per cent of  the cases brought to the WTO on trade remedy 
measures have gone in favour of those who had brought the complaint, the fact that the Appellate Body is overstepping its functions is  at present being ignored.  From the point of 
view of the developing countries, the pro cess of securing redress, through judicial 
interpretation, when the law is found to be not  responsive to their needs, has also another 
serious limitation.  The cost of bringing the case to WTO is often extremely high.   
 
In the situation, it was considered that inclusi on of a provision for major review of the ADP 
Agreement after the lapse of first five years and thereafter at the end of every five years with a view to 
considering whether any modifications are required in  the rules, may go a long way in ensuring that 
the system remains responsive to the needs of all countries and in reducing the trade frictions that are 
created at present as a result of the disputes being brought to the WTO.   
 
It was however felt that it would be necessary to  ensure that any such proposal for review, did 
not result in those countries which were at present re fusing to change their practices, to postpone the 
negotiations on such practices, to th e review after first five years.   
 
 
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3 An example of this is provided by the Appellate Body decision in the case of  zeroing.  The practice of 
zeroing or of ignoring negative margins, while calculating the margins for the determination of final anti-
dumping duty was being followed by the US, EU and Canada even before the Uruguay Round.  In the Round some of the exporting countries had proposed that the Agreement should prohibit the use of this practice.  The 
proposal however was not accepted.  It was therefore rightly assumed by coun tries which used this practice that 
its use was not prohibited and it was open to them to use zeroing practice, if th ey so wished, under the 
provisions of the Agreement which was being adopted.  Against this background, according to some eminent 
jurists when the question of the compatibility of this practice was raised before the Appellate Body, it would have been appropriate for it to refer the matter to WTO legislative organs General Council or Ministerial 
Conference, for review, if it considered  that the existing rules were inequ itable and needed to be modified.  
Instead the panels and the Appellate Body appear to have ignored the drafting history and resorted to the creation of new law by ruling that in their view the pr actice of zeroing was not perm itted by the Agreement.  
[See Terence P. Stewart, Amy S. Dwyer and Elisabeth H. Hein:  Trends in the Last Decade of Trade Remedy Decisions:  
Problems and Opportunities for the WTO Dispute Settlement System, Arizona Jour nal of International and Comparative 
Law, Vol. 24, 1 November 2007]